(1987) Tags: Columbia
RECORDED PICTURE COMPANY [PRODUCTIONS] LIMITED et al. v. NELSON ENTERTAINMENT, INC.
The producers of Bernardo Bertolucci’s ‘The Last Emperor’ entered into a written agreement with the distributor Hemdale to exploit the movie domestically in the theatrical, television, and home video markets. The agreement contemplated that the distributor would enter into a separate contract with a subdistributor for home video release and obligated the distributor to require that the subdistributor pay 70 percent of the gross receipts directly to the producers.
The distributor entered into a subdistribution contract but did not require the subdistributor to pay anything directly to the producers. Moreover, despite the provision in the producer-distributor agreement requiring that the producers receive 70 percent of the gross receipts, the distributor agreed to a 50/50 split of the net receipts between itself and the subdistributor. The subdistributor approved this arrangement without actual knowledge of the terms of the producer-distributor agreement.
The producers filed this action against the distributor and the subdistributor, seeking to recover 70 percent of the gross receipts from the home video release of ‘The Last Emperor’. The producers and the subdistributor filed cross-motions for summary judgment. The trial court ruled in favor of the producers, concluding that the subdistributor was bound by the 70 percent gross receipts provision in the producer-distributor agreement, not by the 50 percent net receipts provision in its own contract. The subdistributor has appealed, arguing that its obligations are governed by its contract with the distributor, not by the producer-distributor agreement to which it was not a party.
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